The Role of Decentralized Solar in Completing Indian Electrification(with Robin Burgess, Michael Greenstone and Nicholas Ryan)

Energy Research

Access to electricity is critical to encouraging growth and reducing poverty. Around the world, 1.3 billion people have no access to electricity, including 300 million Indian citizens, most of whom live in rural areas. At the same time, the rapid growth of the electricity sector in India will not be sustainable if it relies on burning ever more fossil fuels. Small, decentralized energy projects may therefore play an important role in providing universal access and may reduce the carbon-intensity of electricity load growth.Solar energy is gaining a lot of traction in the rural market in India, particularly with the falling prices of inputs. In comparison with the electric grid, solar energy has lower capital costs, can easily be extended to remote rural areas and will reduce carbon emissions of the electricity generation sector. However, the appliances offered by solar energy are limited, and maintenance of the equipment is costly and logistically challenging, particularly in remote areas. This study uses a randomized control trial in collaboration with Husk Power Systems (HPS) to identify the price elasticity of demand for solar energy, model the nature of competition across energy sources in rural India and evaluate the welfare benefits of solar energy for households in rural Bihar.Funding Support: IGC Bihar, Acumen Fund, Shakti Foundation, USAIDProject Status: Implementation ongoing